Sunday, June 12, 2011

Oil and the Libya War

"By November 2007, a State Department cable noted 'growing evidence of Libyan resource nationalism.' It noted that in his 2006 speech marking the founding of his regime, Gaddafi said: 'Oil companies are controlled by foreigners who have made millions from them. Now, Libyans must take their place to profit from this money.' His son made similar remarks in 2007.

"Oil companies had been forced to give their local subsidiaries Libyan names, the cable said. Eni, for example, became Mellita, and the Spanish firm Repsol became Akakoss. Labor laws were amended to 'Libyanize' the economy, and oil firms were pressed to hire Libyan managers, finance people and human resources directors...

"But doing business in Libya remained difficult. 'Everything in Libya — everything — had to be approved by Gaddafi or one of his sons,' said Nansen Saleri, the founder of Houston-based Quantum Reservoir Impact and former head of reservoir management at Saudi Aramco. '. . . That’s one reason we elected not to be involved.'

"Saleri said that he would like to do business enhancing the percentage of oil recovered from known reservoirs but that he would wait for the political situation to settle down...

"But Libya’s oil production has foundered, sagging to about 1.5 million barrels a day by early this year before unrest broke out. The big oil companies, several of which had drilled dry holes, felt that Libya was not making the best exploration prospects available. One major company privately said that it was on the verge of a discovery but that unrest cut short the project."

The quotes above are from a Washington Post story which does shake my certainty that oil was largely irrelevant to the American, British, and French decision to become involved in Libya's civil war. However, the very last sentence also matters. Qaddafi may have been difficult to deal with, but civil conflict and uncertainty are worse, and no one knows what Libya's future holds. At most, I think his oil policy simply represented a key reason that NATO powers saw Qaddafi as expendable in a way that they don't Bahrain's royal family, for example.

It's worth mentioning that the British and French were actually the drivers of this intervention, and in that light, the refugee issue bears mentioning:

"The European responses to the predicted influx of migrants from Tunisia and Libya have been ones of panic; Prime Minister Silvio Berlusconi has claimed that Italy will be 'flooded' with half-a-million migrants, while the British Prime Minister David Cameron has repeatedly conflated trans-Mediterranean migration with security and Britain’s national/capitalist interest, couching it all in liberal interventionist terms. Speaking before Parliament on 14 March 2011, Cameron stated: 'Do we want a situation where a failed pariah state festers in Europe’s southern border, potentially threatening our security, pushing people across the Mediterranean and creating a more dangerous and uncertain world for Britain and for all our allies as well as for the people of Libya?' Meanwhile the neoliberal interest behind British attitudes to the North African revolutions was plain to see: 'Europe needs to follow through on its declaration with a real and credible offer to these countries based on three of the key freedoms – movement of goods, services, and investment.'

"Noticeably while Cameron talks about the 'movement of goods, services, and investment,' another key freedom and one that underpins Schengen, the free movement of people, is absent. The contradiction between the free flow of capital and the free flow of people was starkly illuminated by Cameron who in the same speech advocated for the free movement of capital and at the same time warned against the movement of people in terms that paint migrants as an almost existential threat and seek to conflate migration with terrorism. For the idea of any movement of people from Europe’s southern neighbors creates a sense of panic, as Cameron so ably demonstrated in a speech to Parliament on the eve of the US and European enforcement of the No-Fly Zone on 18 March 2011: 'Libya will become... a state from which literally hundreds of thousands of citizens could seek to escape, putting huge pressure on us in Europe. We must also remember that Gaddafi is a dictator who has a track record of violence and support for terrorism against our country.'"

1 Comments:

I think it's pretty obvious oil was a big deciding factor for the French, alongside Sarkozy's domestic political situation post-MAM scandal and the disastrous results in France's regional elections.

Oil concessions are being negotiated with rebels now, have no doubt about it. So too for the Italians, a major investor there. Sooner or later the countries had to decide which side of the uprising to back or risk losing major access should the rebels win. In February, it looked like Qadhafi was a low hanging fruit, so they went with it.

There might be refugee issues to worry about but much more important was oil and questions of the mediterranean strategic's stability.

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I am an Associate Professor in History at Shippensburg University, where I teach courses in Middle Eastern and world history. My two major research areas are the Middle East from the 7th through 10th centuries and the Persian Gulf from ancient times to the present. Nothing on this site represents an official position of Shippensburg University.